System 3: The Next Frontier in Market Research

Sponsored by: Irrational Agency

Consumer decision making does not just come down to rationalizing the purchase and working with a simple desire for the product. Behavioral science may be missing out on a key decision making influence - the imagination.

Think about the next time you’re going to eat dinner. Do you immediately know, without thinking, what it will be? If so, that’s your System 1 speaking. Are you working out how much it will cost and the number of calories versus your daily budget? That’s System 2.

Or perhaps there is something else going on: maybe you are considering different meals and options, imagining what each one will taste like, considering how they will feel to eat (and how your body will feel afterward), working out where you’ll eat – home cooking, restaurant or takeaway? Doesn’t this process of imagining the different options feel essential to making some types of decision?

Recent discoveries in neuroscience and psychology have shown that behavioral science is missing this essential piece. A crucial way that we make choices: with our imagination.

Consumers imagine their possible futures: the outcomes they would experience after a choice, and how those outcomes will make them feel. The future that evokes the best mental reward will be the one they choose. These processes make up a new part in our understanding of the mind: System 3.

Unlike the automatic, reactive System 1, or the calculating, reflective System 2, System 3 is future-facing and relies on our imagination to help us simulate and feel our way through a future scenario.

Understanding how consumers make decisions in System 3 presents a new opportunity for marketers to:

Know how and why customers make choices

Predict and optimize the success of a new product

Learn what really motivates people

As one of our clients put it: ‘System 3 tells you not just the what that customers want but also the why.’

How System 3 works:

Stored in everyone’s brain is a mental representation or “map” of the world outside. This map is made up of a series of ‘nodes’, which could be brands, products, beliefs or images, and their connections, or associations, to each other. We call this an Implication Map.

When we are presented with a new decision to make, we refer to our implication map, and navigate through it, seeking the most pleasurable option. We explore the nodes, or points, on our map, exploring the cause-and-effect relationships between them. We mentally try on different plans; figuring out how we will feel in response to different outcomes. Anticipating these outcomes, before we act, creates mental pleasure (or pain, if we imagine a negative outcome). Humans seek to maximize pleasure so, using our System 3, we are likely to choose whichever option is most mentally rewarding.

Therefore, understanding which nodes on the map create the strongest mental reward gives companies a huge advantage when trying to launch a new product, or understand how to best manage the relationship between a brand and its consumers.

Measuring System 3 decisions, alongside System 1 and System 2 decisions, improves your chances of success when you talk about, advertise, launch or otherwise promote something new – be it a product or an experience.

New research methods for System 3

When measuring the choices of System 1 and System 2 we can ask consumers or observe their behavior, but how can we measure decisions made in our imaginations?

A new generation of System 3-focussed implicit measurement tools digs into the imagination, beliefs, and language used by respondents, to build a map of how they see the world, and how they can be influenced.

Quantitative versions of these products do this by prompting respondents with a series of stimuli under time pressure, recording the responses and associations they make, their reaction time and following up with a detailed drill-down into the topics that are most important to the individual respondent. Qualitative System 3 methods use projective, creative and play-based elicitation to get a rich understanding of how consumers imagine their futures and their choices.

A worked example: concept testing

Let’s take the example of a new product, an avocado ice-cream, for example, and walk through how measuring System 3 leads to improved chances of product success over just measuring Systems 1 and 2.

As consumers of a not-yet-launched product, we can’t know exactly how it might taste. We don’t know how it might look. But what we can do is draw on a number of associations and previous experiences to create a mental simulation of how we might experience this product. If this simulation is rewarding and enjoyable, we’ll probably try the ice-cream. In the case of the avocado ice cream, the implication map may look like this:

The System 3 tool also measures how rewarding or positive each node is. This predicts how consumers will feel about the new product, allowing the client to make a decision about whether to launch it.

This tool is powerful because System 3 is used consistently by consumers to learn about, evaluate, buy and consume products. This means the same research can be used to test a concept, optimize the product features and design a communications strategy for the launch.

Why System 3 maps help

Building an implication map allows you to:

Identify the mental pathways to your product, highlighting key barriers and what you need to do to overcome these (i.e. what are the negative associations with avocado ice-cream? What positive associations outweigh these? For whom?)

Understand what language resonates best with your target market

Identify the right adjacencies for your product (i.e. should avocado ice-cream be placed with health food, or indulgent treats?)

Maximize the mental reward for choosing your product or brand, by reviewing the map to find the most rewarding path for your consumers

You can try System 3 live, by creating your own System 3 map of the future of the market research industry here. We surveyed attendees at recent IIeX events in Chicago and Amsterdam and will soon be able to share with you the industry’s combined projection of the future.

Behavioral science and implicit measurement have started to make a real change to how research is done. System 3 is the next generation of psychological insight that – we believe – will change the industry landscape again.

4 responses to “System 3: The Next Frontier in Market Research”

Do you understand that System 1 and System 2 are theoretical constructs with no reality attached to them? Why then would we possibly need a System 3. If Kahnemann didn’t need a third system to describe choice behavior, I’m not sure you adding one makes much sense.

Kahneman’s work is seminal but his work on dual process theory was mostly done 20-40 years ago. An accumulation of evidence from neuroscience (both human and animal) since then has shown the importance of mental simulation and imaginative processes both in decision-making and in broader psychology.

As you know, Kahneman didn’t invent the ideas of System 1 and 2. Dual-process theory long predated him and the “System” labels were coined by Stanovich and West; Stanovich himself has now proposed the possibility of a third system, as have Evans and other leading dual-process thinkers.

Most fundamentally, you are right of course that Systems 1, 2 and 3 are all theoretical constructs. You can define and divide up the processes and functions of the brain in any way you like, and give them whatever labels suit you best. Some people prefer to model the brain as a single entity without duality, others find it more productive to consider several distinct parts.

System 1 and 2 have emerged over the last few decades as useful groupings for particular mental processes, and I anticipate System 3 will be just as useful. Of course we are at the early stages of this, and will have to see if a consensus emerges in the discipline. So far, people seem to find it a useful distinction that helps push their thinking a step beyond the rational/intuitive dichotomy – we will keep refining it and see what happens next.

Leigh – my issue is that we are multiplying constructs that, in and of themselves, have little epistemological status. We don’t know that System 1 and 2 exist, never mind proposing a System 3. And what’s to prevent System 4 from emerging as another possible means of our knowing and interacting with the world. We may as well bring back homunculi.

Interesting idea. Indeed expectations have a strong impact on choice as well as usage experience. However, I do believe that the behavior is still a result of System 1 and System 2 processing of those expectations and any past experience consumers may have.